Employment Agencies

There are three types of employment agencies: (1) public agencies operated by federal state, or local governments; (2) agencies associated with non-profit organizations; and (3) privately owned agencies.

Public and Non profit Agencies: Every state has a public, state-run employment service agency. The US Department of Labor supports these agencies, in part through grants, and in part through other assistance such as a nationwide computerized job bank. The National Job Bank enables agency counselors in one state to advice applicants about available jobs not just in their local area, but in other areas as well. In India and other developing countries Public agencies are not so organized.

These agencies are an important source of workers, but some employers have had mixed experiences with them. For one thing, applicants for unemployment insurance are required to register and to make themselves available for job interviews. Some of these people are not interested in getting back to work, so employers can end up with applicants who have little or no desire for immediate employment. And fairly or not, employers probably view some of these local agencies as rather lethargic in their efforts to fill area employers’ jobs.

These agencies’ usefulness is actually on the rise and available in U.S only. Beyond just filling jobs, for instance, counselors will visit an employer’s work site, review the employer’s job requirements, and even assist the employer in writing job description. Most states have turned their local state employment service agencies into “one-stop” shops. The 1998 Workforce Investment Act required states to give any citizen access to one stop shop neighborhood training / employment / educational services centers.

Services available to employers include recruitment services, tax credit information, training programs, and access to local and national labor market information. More employers should probably be taking advantage of the 1900 Department of labor career centers (formerly the “unemployment offices” in many cities). One survey of 3,700 employers by the US Chamber of Commerce found that less than 20% used one of the centers.

Other employment agencies are tied to nonprofit organizations. Most professional and technical societies, such as the Institute for Electrical and Electronic Engineers (IEEE) have units that help members find jobs. Many public welfare agencies try to place people who are in special categories, such as those who are physically disabled or are war veterans.

Private Agencies: Private employment agencies are important sources of clerical, white collar, and managerial personnel. They charge fees (set by state law and posted in their offices) for applicant they place. Market conditions generally determine whether candidate or employer pays the fee. Most are free-paid jobs, in which the employer pays the fee. Employers correctly assume that this is the best way to attract qualified currently employed applicants, who might not be so willing to purse other jobs if they had to pay the fees.

Why turn to an agency? Reasons include:

1. Firm doesn’t have its own HR department and is not geared to doing recruiting and screening.
2. Firm has found it difficult in the past to generate a pool of qualified applicants.
3. A firm must fill a particular opening quickly.
4. There is a perceived need to attract a greater number of minority or female applicants.
5. Firm wants to reach currently employed individuals, who might feel more comfortable dealing with agencies than with competing companies.
6. Lastly a firm wants to cut down on the time you’re devoting to recruiting

Employment agencies also have disadvantages. For example, the employment agency’s screening may let poor applicants by pass the preliminary stage of a company’s own selection process. Unqualified applicants may go directly to the supervisors responsible for hiring, who may in turn naively hire them. Conversely, improper testing and screening at the employment agency could block potentially successful applicants from entering your applicant pool.

The help avoid such problems, experienced recruiters suggest the following:

1. Give the agency an accurate and complete job description.
2. Make sure tests, application blanks, and interviews are part of the agency’s selection process.
3. Periodically review data on candidates accepted or rejected by your by your firm, and by the agency. Check on the effectiveness and fairness of the agency’s screening process.
4. Screen the agency. Check with other managers or HR people to find out which agencies have been the most effective at filling the sorts of positions need to be filled. Review the Internet and a few back issues of the classified ads to discover the agencies that handle the positions wanted.

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